Accel-KKR has announced the last closing of its third private equity fund with $600m (â¬424m) in capital raised, overshooting its initial target by a third as middle market deals remain attractive and buyout shops further refine their knowledge of specific sectors.

The private equity firm, which was founded jointly in 2000 by venture capitalist Accel and US buyout company Kohlberg Kravis Roberts and continues to have relationships with principals from both, had an intital target for the fund of $450m.

Accel-KKR focuses on investments in mid-market technology companies with revenues of between $15m to $150m annually.

The fund was oversubscribed and raised Accel-KKR’s total assets under management for all its funds to more than $1bn, according to a statement.

Rob Palumbo, managing director of Accel-KKR, said: “Over the years, our unique focus on mid-market and growth-oriented technology buyouts and investments has translated into a focus on building value through growth rather than financial leverage.”

In June, Accel-KKR backed the launch of M2 Technologies Partners, an investment firm that would focus on purchasing software companies. As part of the transaction, the two heads of M2, Mark Duffell and Michael Piraino, became advisors to Accel-KKR.

The deal represents an expected trend for private equity firms to further develop their sector skills in part by creating or supporting specialist investment companies, according to research by Private Equity News, a sibling publication of Financial News.

Meanwhile, the environment for middle market buyouts has remained more active than for larger deals.

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As of the end of last week, according to investment banking information provider Dealogic, the middle market for buyouts—defined as deals worth less than $1bn—had declined in volume this year to date by 36% from the same period last year, declining to $79.7bn on 648 deals.

Last year, there were 814 such deals worth a combined $123.8bn.

The decline in large deals of $1bn or greater has been much steeper, declining by 82% from $489.4bn through this time last year to just $86.3bn this year. The number of deals has dropped from 111 to 81.